SC Admits Google's Appeal Against NCLAT Order

SUMMARY

The cross-appeals were filed by Google, the CCI and the ADIF against the NCLAT’s March order that partially upheld the watchdog’s findings antitrust findings against Play Store

The SC bench, comprising Justices PS Narasimha and Atul S Chandurkar, will now hear the matter in November

The CCI imposed a penalty of INR 936.44 Cr on Google in 2022 for abusing its dominance with regards to its Play Store policies

In the latest twist in the Google antitrust saga, the Supreme Court today admitted a clutch of cross-appeals filed by the US-based company, the Competition Commission of India (CCI) and the Alliance of Digital India Foundation (ADIF).

The cross-appeals challenged the National Company Law Appellate Tribunal’s (NCLAT) March order that partially upheld the competition watchdog’s findings that the big tech major abused its dominant position with regards to its Play Store policy.

As per Economic Times, a bench of SC, comprising Justices PS Narasimha and Atul S Chandurkar, said it will now hear the matter in November.

The NCLAT’s March order largely backed the CCI’s core findings that Google flouted antitrust norms by abusing its dominance through its Play Store policies and engaged in unfair promotion of Google Play. It is this order that the big tech major has challenged.

Besides, it has also appealed the NCLAT’s subsequent May 1 order that corrected its “inadvertent error” in its original judgment (more on this later).

Google Vs CCI

The story harks back to November 2020, when the CCI launched a probe into Google Play Store’s billing policies. Subsequently in 2022, the competition watchdog imposed a fine of INR 936.44 Cr on Google for abusing its dominance with regards to its app marketplace policies.

In a separate case, the company was also penalised INR 1,337.6 Cr by the CCI for anti-competitive practices in the Indian Android devices segment.

In the Play Store case, the CCI concluded that Google flouted competition laws by mandating the use of its Google Play Billing System (GPBS) for app purchases while exempting its own apps like YouTube from similar commission structures.

The watchdog also directed the company to “not restrict app developers from using any third party payment processing services”, and ordered the big tech major to avoid imposing “unfair, unreasonable, discriminatory, or disproportionate” conditions on app developers.

Subsequently, Google moved the NCLAT and challenged the CCI’s order. In March this year, the NCLAT upheld several findings of the watchdog. The NCLAT concluded that the company did leverage its dominance in two relevant markets – namely licensable operating systems for smartphones and app stores for Android – to promote Google Pay in violation of the Competition Act.

The NCLAT also upheld the CCI’s finding that Google had imposed unfair and discriminatory conditions on developers through mandatory use of GPBS.

However, the appellate tribunal, in the same order, set aside the watchdog’s orders on denial of market access and restriction of innovation. It cited insufficient evidence of restriction on technical development and Google billing services accounting for less than 1% of UPI market share as reasons for quashing the particular directive.

Two months later, in a clarification on May 1, the NCLAT reinstated two directions which required Google to disclose data policies and refrain from leveraging its billing data for competitive advantage.

Afterwards in July, the big tech juggernaut moved the SC to challenge the appellate tribunal’s ruling and sought a favourable review.